The Debt Management Office (DMO) of Nigeria has announced the successful allotment of N4.28 billion in the May 2025 Federal Government of Nigeria (FGN) Savings Bonds Auction, marking another stride in the government’s efforts to promote financial inclusion and strengthen the domestic debt market.

Background: FGN Savings Bond Programme

The FGN Savings Bond Programme, which commenced in March 2017, was designed to give retail investors—especially low to middle-income earners—an opportunity to invest in secure government securities. The initiative aims to deepen the domestic bond market, enhance financial literacy, and offer citizens a reliable means of saving while earning predictable returns. These bonds are part of the government’s broader financial strategy to raise funds to support national development projects and manage the country’s debt portfolio efficiently.

May 2025 Auction Performance

In May 2025, the DMO allotted a total of N4.28 billion, which is slightly lower than the N4.34 billion recorded in April 2025. Despite the marginal decline, the consistent performance reflects sustained interest from retail investors in the savings bond product. The auction was open for subscription from May 5 to May 9, 2025, allowing individuals to invest in two different bond tenors.

Bond Tenors and Maturity Dates

The May 2025 offering included two savings bond tenors:

  • A 2-year bond maturing on May 14, 2027

  • A 3-year bond maturing on May 14, 2028

Both bond series will settle on May 14, 2025, and will provide investors with quarterly interest payments. These payments will be made on the following dates each year: August 14, November 14, February 14, and May 14 until the bonds mature.

Interest Rates and Subscription Data

The DMO offered the 2-year FGN Savings Bond at an interest rate of 16.173%, reflecting the current macroeconomic environment and government borrowing costs. This bond series attracted significant interest, with 994 successful subscriptions amounting to a total allotment of N840.43 million.

While full data for the 3-year bond allotment was not detailed in the initial report, the overall subscription across both tenors suggests strong investor confidence in government securities as a safe investment channel, especially amid volatile returns in other investment classes.

Comparison with April 2025 Auction

To provide context, the April 2025 auction had a slightly higher allotment of N4.34 billion in FGN Savings Bonds. Additionally, the DMO conducted larger-scale auctions in April through two reopened issues:

  • The 19.30% FGN APR 2029 (5-Year Bond)

  • The 19.89% FGN MAY 2033 (9-Year Bond)

These two instruments raised a total of N397.898 billion, highlighting the broader demand for long-term government bonds by institutional and wholesale investors.

Benefits of FGN Savings Bonds for Retail Investors

FGN Savings Bonds offer numerous benefits to small and medium-scale investors:

  • Guaranteed principal and interest payments backed by the full faith of the Federal Government

  • Quarterly interest provides a steady income stream

  • Low minimum subscription amount (typically from N5,000), making it accessible to all income levels

  • Risk-free investment compared to other instruments affected by market fluctuations

Through these bonds, the DMO encourages the habit of savings and investment, especially among first-time investors and those with limited exposure to the capital market.

Impact on Financial Inclusion and Domestic Market Development

The steady uptake of FGN Savings Bonds reflects growing financial inclusion, one of the key goals of the Central Bank of Nigeria (CBN) and other regulatory bodies. By simplifying access to government securities, the DMO has brought capital market participation closer to grassroots investors, encouraging wider involvement in formal financial systems.

Moreover, the programme contributes to domestic resource mobilization, reducing the country’s dependence on external debt. It also helps in diversifying government financing sources, ensuring more sustainable public debt management.

Looking Ahead: Outlook for Savings Bond Programme

With economic pressures and inflation affecting household incomes, government-backed savings instruments like the FGN Savings Bonds are expected to continue gaining popularity. The attractive interest rates offered on these bonds compared to traditional savings accounts make them a compelling option for income preservation and growth.

Future auctions are expected to maintain this momentum, particularly if interest rates remain favorable and public awareness continues to rise. The DMO’s consistent engagement through its website and media channels helps in educating the public and expanding participation.